WATCO COMPANIES, L.L.C. ANNOUNCES A CASH TENDER OFFER FOR ANY AND ALL OF ITS OUTSTANDING 6.500% SENIOR NOTES DUE 2027

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Jul 08, 2024, 08:08 ET

PITTSBURG, Kan., July 8, 2024 /PRNewswire/ -- Watco Companies, L.L.C. and its wholly-owned subsidiary, Watco Finance Corp. (collectively, the "Company"), today announced that it has commenced a cash tender offer to purchase (the "Offer") any and all of the outstanding 6.500% Senior Notes due 2027 (the "2027 Notes") as set forth in the table below.

Series of Notes	CUSIP Numbers⁽¹⁾	Aggregate Principal Amount Outstanding	U.S. Treasury Reference Security⁽²⁾	Bloomberg Reference Page⁽²⁾	Fixed Spread⁽²⁾
6.500% Senior Notes due 2027	941130AB2/ U94127AB0	$600,000,000	2.875% U.S. Treasury due June 15, 2025	FIT3	0 bps

(1) No representation is made as to the correctness or accuracy of the CUSIP numbers listed in this press release or printed on the 2027 Notes. It is provided solely for the convenience of Holders of the Notes.
(2) The consideration (the "Consideration") payable per $1,000 principal amount of 2027 Notes validly tendered and accepted for purchase will be based on the fixed spread specified in the table above (the "Fixed Spread"), plus the yield to maturity of the U.S. Treasury Reference Security (the "Reference Yield") based on the bid-side price of the U.S. Treasury Reference Security specified above (the "Reference Page") at 11:00 a.m., New York City time, on July 17, 2024 (such date as it may be extended, the "Price Determination Date"). The sum of the Fixed Spread and the Reference Yield is referred to as the "Repurchase Yield." The Consideration does not include Accrued Interest (as defined in the Offer to Purchase), which will be paid on 2027 Notes accepted for purchase by the Company as described herein. The formula for determining the Consideration and Accrued Interest is set forth on Annex A of the Offer to Purchase (as defined below).

The Offer is being made solely pursuant to the terms and conditions set forth in an Offer to Purchase, dated July 8, 2024 (the "Offer to Purchase"). Holders of the 2027 Notes are urged to carefully read the Offer to Purchase before making any decision with respect to the Offer. There is no letter of transmittal for the Offer. The Offer is not conditioned on any minimum amount of the 2027 Notes being tendered. Subject to applicable law, the Company may amend, extend or terminate the Offer in its sole discretion. Capitalized terms used but not defined in this announcement have the meanings given to them in the Offer to Purchase.

The Offer will expire at 5:00 p.m. New York City time on July 17, 2024, unless extended or terminated by the Company (such time and date, as the same may be extended or terminated by the Company in its sole discretion, subject to applicable law the "Expiration Date"). Tendered Notes may be withdrawn at any time (i) at or prior to the earlier of (x) the Expiration Date and (y) in the event that the Offer is extended, the tenth business day after commencement of the Offer, and (ii) after the 60th business day after commencement of the Offer if for any reason the Offer has not been consummated within 60 business days after commencement (such time and date, as the same may be extended by us in our sole discretion, the "Withdrawal Deadline"), but may not thereafter be validly withdrawn, unless otherwise required by applicable law.

Holders of the 2027 Notes must validly tender their 2027 Notes, or submit a Notice of Guaranteed Delivery and comply with the related procedures, prior to the Expiration Date, and not validly withdraw their 2027 Notes prior to the Withdrawal Deadline, in order to be eligible to receive the Consideration. There is no letter of transmittal for the Offer. Accrued and unpaid interest will be paid on all 2027 Notes validly tendered and accepted for purchase from the last interest payment date up to, but not including, the settlement date, which is expected to be on or about July 22, 2024. On the Price Determination Date, unless extended, the Company will issue a press release specifying, among other things, the Consideration for the 2027 Notes validly tendered and accepted. For Holders who deliver a Notice of Guaranteed Delivery and all other required documentation at or prior to the Expiration Date, upon the terms and subject to the conditions set forth in the Offer to Purchase (including the Financing Condition and the General Conditions), the deadline to validly tender their 2027 Notes using the guaranteed delivery procedures will be the second business day after the Expiration Date and is expected to be 5:00 p.m., New York City time, on July 19, 2024.

The purpose of the Offer is to acquire all outstanding 2027 Notes. The Company intends to fund the Offer with the net proceeds from a concurrent senior notes offering, and the Offer is conditioned upon the successful completion of such notes offering.

The Company has retained Wells Fargo Securities to act as the dealer manager and D.F. King & Co., Inc. to act as the tender and information agent for the Offer. For additional information regarding the terms of the Offer, please contact Wells Fargo Securities at +1 (866) 309-6316 (toll-free), (704) 410-4759 (collect) or [email protected]. Requests for copies of the Offer to Purchase and questions regarding the tendering of 2027 Notes may be directed to D.F. King & Co., Inc. at (212) 269-5550 (for banks and brokers) or (800) 283-9185 (all others, toll-free) or email [email protected]. The Offer to Purchase, and the related Notice of Guaranteed Delivery are available at the following website: www.dfking.com/watco.

None of the Company, the Dealer Manager, the Tender and Information Agent or the trustee (nor any director, officer, employee, agent or affiliate of, any such person) makes any recommendation whether Holders should tender or refrain from tendering 2027 Notes in the Offer, and no one has been authorized by any of them to make such a recommendation. Holders must make their own decision as to whether to tender their 2027 Notes and, if so, the principal amount of the 2027 Notes to tender.

This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Offer is only being made pursuant to the Offer to Purchase. Holders of the 2027 Notes are urged to carefully read the Offer to Purchase before making any decision with respect to the Offer.

About Watco Companies, L.L.C.

Watco, headquartered in Pittsburg, Kansas, is a leading provider of integrated transportation services, providing a broad set of supply chain solutions. Watco provides short line railroad, terminal and port, and logistics services to over 3,500 customers across the U.S., Mexico, Canada and Australia. Watco owns and operates a diverse portfolio of transportation infrastructure assets across North America which includes being the second largest short line railroad operator (by mileage) and, according to Watco internal estimates, one of the largest bulk and break bulk terminaling services providers. More information about Watco and its subsidiaries can be found at www.watco.com

Forward-Looking Statements

This press release includes forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. They use words such as "anticipate," "believe," "intend," "plan," "project," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," or the negative of those terms or other variations of them or comparable terminology. In particular, statements, express or implied, concerning the timing for the closing of the Offer and the satisfaction of the conditions to the closing of the Offer are forward-looking statements. All statements other than statements of historical or current facts included in this press release that address activities, events, or developments that are expected, believed, or anticipated to occur or that may occur in the future are forward-looking statements.

Forward-looking statements are based on the Company's current expectations and beliefs concerning future events affecting the Company, and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not know whether its expectations will prove correct. Any or all of the forward-looking statements in this press release may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. There are a number of factors that could cause the Company's actual results to differ materially from those indicated in these statements.

The information set forth herein speaks only as of the date hereof, and the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Watco Companies, LLC